With record levels of unemployment claims filed, the potential for fraud naturally rose this year, state labor officials said as they released a report from a consulting firm this week.
While fraud risks increased, so did mitigation efforts from the state’s Unemployment Insurance Agency, according to the report prepared by Deloitte. The Michigan Department of Labor and Economic Opportunity contracted Deloitte in July to assist with the development of fraud prevention measures.
The report found that UIA processed about 2.8 million unique claims since the first surge of COVID-19 in March, “handling as many claims in seven months as it would normally see in six years.”
“I’ve been asking questions about this – whether the agency thought its actions have contributed, if their fraud detection tools were altered and if those alterations impacted the agency’s effectiveness, and what the department is doing to make sure our state’s unemployment system is protected and efficient,” Hall said in a statement. “I have gotten few answers until today, when we discovered that their actions did contribute.”
The first measure to combat fraud was hiring former U.S. Secret Service special agent Jeffrey Frost to advise on countering criminal hacks of the state’s unemployment system.
“When unemployed Michigan workers needed emergency financial assistance the most, criminals began filing malicious claims in an attempt to take advantage of a global pandemic,” Frost said. “Law enforcement and the UIA took action to identify the fraud and malicious filings to investigate crimes against the unemployment system.”
